ROI Refresh in Founder-led Sales
ROI Refresh in Founder-led Sales
Business cases need to be CFO ready at (most) dollar amounts
Whether you’re the Founder of an AI company or traditional software company, the business case and ROI is more required than ever. This is not new, but the quality standards for ROI and quality are much higher than before.
Often in a business case, you’ll hear statements like, “We helped your team save 2 hours, leading to $X savings per year.” If you did the math across all vendors making such claims, companies would benefit more from buying software than selling their own products.
This does not mean the above is not a valid use case, but the context of said savings and impact must be more explicit than ever. There are three main areas where impact lies in a business case: increase revenue, reduce costs (or maximize efficiency), or reduce risk. Below are some examples of cases for replacing incumbent/competitive solutions and “category creators.” Assuming you have the technical win:
Start with an overview of the business case
How does this tool help us meet a company’s objectives for the year?
Replacing Incumbent Example: Customer’s internal OKR: “Profitability by 2025: reduce software spend by 20%”
Category Creator Example: Customer’s internal OKR: “Use AI across all departments by end of H1 to focus on doing more with our existing headcount”
What is the current problem you’re solving?
What is the problem the company has in regards to the problem you solve? What can it not do technically that allows your solution to be differentiated?
If an existing solution exists, why do they need to buy from you? Are there better “consolidation alternatives” you need to highlight how and why you’re better?
What is a scenario where there was a negative impact or repeat wasted cost you would alleviate by using your solution?
Why does this need to be solved now?
Replacing Incumbent Example: Renewal of competitor 2 months out, with 30-day opt-out. We have preference for (new solution) with the following results of the evaluation below
Category Creator Example: We are releasing X feature this quarter, and need a minimum of 45 days to implement. By purchasing now, we can release on time and improve the capabilities of “Big Bet #1” mandated by our CEO.
The business case with a value driver to tie it all together
Increase Revenue business case examples
Replacing Incumbent: After the evaluation, we’ve learned this allows for more accurate forecasting and optimization of resources. In the POC, we saw a 15% improvement in accuracy, resulting in an estimated $800,000 additional revenue
Category Creator: Our AI agent had response rate accuracy of 95%, and reduced wait times. Higher NPS and retention rates allow us to increasing customer lifetime value by 20% on average, resulting in an estimated $500,000 additional revenue
Reduce Costs (or Maximizes Efficiency) business case examples
Replacing Incumbent: During the evaluation, we used the following clusters (...) and ran the workload in ⅓ the time. This optimization can cut cloud computing costs by 30%, saving us approximately $1.2 million
Category Creator: The use of AI agents on our current support team allows us to reduce the need for additional hiring and enables our current team to resolve 4x more tickets in the same amount of time during a full 8-hour shift. Rather than focusing on reducing headcount, we can reallocate the $1.5 million in hiring for support towards other important initiatives at the company
Reduces Risk business case examples
Replacing Incumbent: Using modern machine learning and real-time threat intelligence, we identified the following threats our current solution missed: [insert your example from POC]. This improvement can reduce the risk of data breaches by 40%, protecting Company A from potential financial losses and regulatory fines, which could amount to $2 million annually
Category Creator: Before using an AI agent, we could not dynamically find threats and vulnerabilities at this scale. During the POC, we were able to reduce the risk of successful attacks by 30%, This allows us to avoid potential losses estimated at $800,000 per year
By doing the above, you put yourself in a much more defensible position regarding the business case. While many other tactics and steps are necessary throughout the sales cycle, having this aspect well-prepared towards the end will significantly increase the likelihood of closing your deals.
Excellent Content of the week
“It took way too long. Don’t do that” - Dylan Field in an interview with Lenny Rachitsky
People love to reference the time it took for a company like Figma to find product-market fit, but even the Founder thinks he could have moved faster in hindsight
“The Series A $1M ARR is a myth” - Robby (Amanda Robson)
Metrics to focus on: ARR, NRR, Future Pipeline, Story to grow to $10M+, REAL product adoption (with proof points), true differentiation in the market